Rafael in $1b Indian anti-tank missile deal

"Defense News": Rafael will sell the Indian Army 321 Spike launchers, 8,356 missiles, and 15 training simulators, and peripheral equipment.

"Defense News" reports that the Indian Army is about to order thousands of Spike anti-tank missiles and peripheral equipoment from Rafael Advanced Defense Systems Ltd. in a $1 billion deal. Indian Ministry of Defence officials told the magazine that the order is for 321 launchers, 8,356 missiles, and 15 training simulators, and peripheral equipment.

Rafael was the only bidder in the tender, which was published in June 2010, and the Indian Army had to obtain a special permit to sign a deal on the basis of a tender with just one potential vendor. General Dynamics Corporation (NYSE: GD), Raytheon Company (NYSE: RTN), Pan-European MBDA, and Russia's Rosoboronexport decided not to participate in the tender.

"Defense News" quotes sources as saying the technology transfer was the main obstacle. The magazine did not say whether the companies that stayed out of the tender refused to share their technology with India, nor is Rafael's position on the matter made clear.

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"Defense News" says that the Indian Army will receive various configurations of the Spike, including ready-for-use missiles already assembled in Israel, partly assembled missiles whose final assembly will take place in India, and missiles that will be fully assembled by Bharat Dynamics Ltd., an Indian government-owned company.

The Indian Army plans to install the Spike missile systems on Russian built combat vehicles. Indian officials said that tests in battlefield conditions have been completed, and that the Spike missiles met all the specifications set by the Indian Army: a range of 2.5 kilometers in day and night conditions, and a 90% accuracy rate. The tender also stipulates that the missiles must have 3G active-passive fire-and-forget guidance systems.

On another matter, an Indian Army official said that the Arrow 2 anti-ballistic missile system, jointly built by Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) and Boeing Co. (NYSE: BA), might become part of India's missile defense solution. India has been mentioned as a possible customer of the Arrow missile, but any deal would require US approval, as it shares in the financing, development, production, and assembly, of the Arrow.

India is one of the largest customers of Israel's defense industry. The Stockholm International Peace Research Institute (SIPRI) says that India's is the world's largest arms buyer, because of its tense relations with China and Pakistan.